Appalachian Basin

Heinz and Park Feed the Cornell Dragon

We are, these days, awash with sophistry coming from anti-gas zealots and funded by the wealthiest of the wealthy.  No better example exists than a recently released working paper from Cornell University entitled “A Comprehensive Economic Impact Analysis of Natural Gas Extractions in the Marcellus Shale.”  This 34-page document, financed by the Park Foundation and the  Heinz Endowments, two millionaire socialist outfits dedicated to using the fruits of capitalism to stop natural gas development, includes but one original data set and that a trivial one.  It is largely a compendium of specious questions, speculation and spurious assertions based on anecdotal evidence.  It is anything but scholarship and demonstrates what an incredibly weak hand our opponents have.  Let’s count the ways:

  1. Reliance on other sham studies.  This study essentially packages and repeats the conclusions from other shoody pieces of work.  Among them are two reports by Headwaters Economics, a leftist think-tank from out west that is dedicated to fighting fossil fuels and development of all kinds.  It also attacks homebuilding on the basis that it increases firefighting costs.  Another source is Arthur Berman, a peak oil true believer, who recently said, in a speech at Cornell Law School (03:44:50),  “The idea of private transport needs to go away” by which he means “the idea that you can just drive yourself anywhere you want to, whenever you want to”.  Berman also happens to have been wrong about pretty much everything to do with shale gas, as our EID associates have noted.  Finally, we cannot help but notice “art economist” Jannette Barth is cited as a source.  We debunked her here and here.
  2. Conflicting assertions.  The study is replete with contradictions.  It is stated on page 13, for example, that “where these new workers move to the region with their families, they will want to put their kids in school” and then also quotes on page 12 that most of these workers will be “a sudden influx of young me, some with families, many without.” It also talks about “population flowing into the region” on page 22 but then, on pages 23-24 suddenly shifts to offering evidence that population declines in counties with gas drilling.  Which is it?  Obviously, the intent is to suggest a boom and bust cycle but no evidence is offered for this.  There are just two sets of conflicting assertions wrapped in an uproven theory.  Moreover, on page 7, it is suggested the boom will last last than 10 years, but then, on page 9, it says “extraction of these total recoverable reserves could take decades.”  Which is it?  Finally, the report says, on page 28, that “land speculation is occurring” but earlier on page 25 suggested counties with natural resource extraction exhbited “less ability to attract investment” and page 17 language suggests a negative effect on adjacent property values from “environmental stressors.”  Which is it?
  3. Use of anecdotal material. Where the report even attempts to use citations, it twice acknowledges relying on anecdotal material.  The reality to anyone reading the report is that it is largely a collection of anecdotes.  Not what we expect from a college with a reputation like Cornell but so be it. Page 14, for example includes the following excerpt from an unidentified “post”:“I say good for the people who finally have a decent paying job, good for the people who are seeing an influx in business, and good for those who saw the opportunity of a move if so desired.  Just remember, there are still those of us remaining who had nothing to do with any of this. We deal with the traffic, destruction, fear of contamination everyday.” This is evidence?  Heck, we get comments like this every day on this blog by anti-gas obstructionists.  They offer them as their views, and theses are countered by other views.  They don’t remotely prove anything with us but, apparently, at Cornell they do count, if your objective is halting natural gas development in your own backyard.
  4. Substitution of speculation for facts.  The shallowness of this working paper is revealed not only in the subsitution of questions for answers, perhaps forgiveable as a prelude to more in-depth followup studies, but, much more importantly, in the unsubstantiated speculation that is rampant throughout it.  It is speculated on page 6, for instance, that natural gas development “changes might include increased competition for labor across industries or decreased ability to retain or attract other industries because of the noise and pollution.”  Where is the evidence for the last part of this, in particular?  This speculation is put forward to imply it is true, although the authors don’t bother citing any basis for it.  Likewise, on page 7, one finds statements that “we can expect that, while there are local industries that could provide inputs to the drillers, a high proportion of expenditures associated with drilling will be made outside of New York or Pennsylvania” and that “if land or mineral rights owners live outside the drilling region, it is unlikely that they will spend their payments in the areas where drilling is occurring.”  This is pure speculation, unsupported by any facts and, indeed, contradicted by the fact Bradford County has the lowest unemployment rate in Pennsylvania.
  5. Heavy Reliance on Proving Inadequacy of Industy by Job Creation Estimates. This brings us to another point.  Nearly the first 11 pages of the paper (which accounts for 1/3 of its length) attempt to call into question the economic impacts of natural gas production by questioning job estimates surrounding the activity.  Essentially the researchers say (over and over) that these estimates are just that “only estimates” and that they are hamstrung by limitations and therefore should be viewed “skeptically”.  That’s fine except for the fact that in the Marcellus the jobs being created aren’t being reported by estimates, but rather actual jobs that have been created.  Take a look at the Pennsylvania’s Department of Labor statistics here and you will see the reports of all the jobs that are currently being produced.  One example of actual jobs from this report: “2010 Q4 Marcellus Shale related industries total employment was 218,200.”  Another good quotation.  From 2009 to 2011 the Marcellus has been responsible for the creation of 72,000 new hires.  These are “actual” jobs that would have not existed if not for the Marcellus.  Cornell’s report was debunked before it was even released due to their shoddy information and arguments that are refuted by actual data, in this case produced from the PA Department of Labor.
  6. Inaccuracies, mistatements and fudging.  This working paper is also filled with what can only be  described as nonsense by anyone with an elementary knowledge of natural gas development in the Marcellus Shale.  It is said, on page 17, for example, that injection wells will be involved in development inbut every indication from geologists is that Pennsylvania and New York are unsuitable for these.   Then, there is the statement that dairy farmers in our region “are being further squeezed because of rising costs for transporting their milk to the dairies,” followed by a suggestion these businesses might go under during the drilling phase because of added trucking costs due to labor competition from gas.  This, of course, is nothing less than ludicrous and ignores the obvious point that additional lease and royalty revenues from their land are precisely what will help farmers stay in business.  If you don’t believe us, check out this piece in the Philadelphia Inquirer (not exactly the bastion of pro gas information). And of course, in classic fashion (for this report anyway) it doesn’t provide a citation for this fairly serious claim.  Of course, why would such an esteemed university like Cornell have any need for citations in their research work?

The fatal flaw in this working paper, moreover, is the condescension of the authors in supposing others are so gullible as to take it seriously.  It’s so bad, in fact, I encourage everyone to read it.  There is no better example of sophistry than this one.  The best part is the Park Foundation has reportedly paid $100,000 toward this shallow piece of work and who knows how much profit from Heinz food sales found its way to this dubious end (hope they’re blushing).

The authors are Susan Christopher, a planner, and Ned Rightor, a headhunter, who previously collaborated on a study of states lure the film industry, although to be fair, it’s not clear this is all there will be to this project.  I am tempted to think this is a great way for the Park Foundation bluebloods to spend their fortune but, with assets of $245,985,452 at the end of 2009, they would have to fund another 2,459 such studies before they exhausted what’s available to them for their NIMBY battle against natural gas development.  Still, every dime helps!


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